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Things to Consider That One Should Not Do While Appointing Company Power of Attorney

Moreover, choosing an individual to represent your company power of attorney is not an easy task. The individual you decide on will be legally empowered to make decisions binding on your business. Some common mistakes should be avoided when providing such authority to make sure that only a competent and worthy person gets the control over your valuable company asset, its legal rights and benefits. 

1.Rushing the process 

Another key factor that requires your serious consideration is the question of who to name as the company’s power of attorney. Hiring fast means you may not give sufficient attention to certain aspects that can notify you that the candidate is probably not righteous or sufficiently skilled for the job. Refrain from making hasty decisions and rushing into this serious decision without carrying out adequate research. 

Conduct a thorough background check on each potential candidate by reviewing references, their academic records, disciplinary records, and others. Furthermore, spend time interviewing face to face more than once to evaluate individual personality and temperance. As much as one may want to avoid taking long in this process, it can prove very costly to bypass key information that may disqualify a particular pick.  

Also, never allow the pressure of time make you take a hasty decision without analyzing all the potential attorneys to the best of your abilities. Failure in this area can significantly harm your business in legal issues decision-making. It is important to take ample time to make a decision before deciding who to hire.

2. Failing to define the scope of authority

It is however important to clearly state in clear terms the specific powers you wish to accord your chosen attorney. When there are no clearly outlined rules of how much authority one possesses, then you are likely to see those in authority misuse the general authority granted to them.  

Enumerate actions such as mandating another company officer to co-sign on any financial transactions exceeding a specific amount. Be sure to capture what this attorney can and cannot do for your company without your permission.  

One of the problems that are associated with the use of the power of attorney agreements is the fact that they are sometimes worded in rather ambiguous terms. Cautiously consider and make proper and reasonable restrictions, and you must state clearly the scope you are planning to give to your chosen representative. To leave things to the imagination may not serve the company’s interest well could be a cause of concern.

3. Selecting based on personal relationships 

Even though it may be more comfortable to nominate your most loyal friend or family member to represent your company in legal issues, it always turns out poorly when you combine business with your personal life in this manner. Even though it may seem rather appropriate, relying on such an approach is fraught with certain risks.

It’s critical to divide feelings into one category and business data into another when entrusting such a vital thing as legal power to your enterprise. No matter how well you know the candidate, never let your biases cloud your judgment: the best man for the job is always the one with the best qualifications.  

Ensuring that the references are checked properly and asking questions is particularly useful if you are thinking of assigning the power of attorney to your company to a friend. Instead, let rationality itself prevail in this monumental decision for your enterprise, not sheer observance. 

4. Failure to require regular reporting

Continuous provision for transparency is necessary, meaning that you must be able to demand detailed reports of your attorney’s activities periodically. Sadly, many entrepreneurs do not have time to check these manipulations and only do that once a year, when preparing the tax or, moreover, do not pay attention to what their representative is doing.

By the time you realized the gravity of the situation, a lot of damage could have been done already. However, demand written updates, on at least a weekly basis, that detail what has been done, what papers have been filed, and what decisions have been made in your company’s name.  

Setting clear expectations from the beginning that you want constant, honest reports from the candidate reduces chances of misuse of power that has been vested in him. Do not find yourself wondering ‘where did the money go’ a year later, require periodic reports on the project’s progress, at least on a quarterly basis or even monthly, if possible.

5. Neglecting to set an expiration date

When choosing the legal representative of your company, one should give certain Powers of Attorney, which are valid only till a certain date. Again, do not make authority ambiguous; agree on a concrete period during which you will recognize them as your delegates.  

It becomes possible through scheduling for an automatic review after one to three years, which means that instead of having the influence last indefinitely without being reviewed for efficiency, you will be able to review if this person is worth trusting or not. Prior to term renewal look at their report and records to see if they have done any actions to remain within the scope.

Introducing the expiration dates eliminates the tendency of sticking to one agreed-on POA and means getting an affirmation that the selected POA serves the best interest of your company. It also offers another chance for broadening the oversight if this is necessary. Besides, routine re-authorization helps to add new aspects to the oversight if this is necessary. Duration of control is another way of putting in measures that enhance protection which no business should lack.


Choosing your power of attorney to run business should not be like shooting from the shoulder, rather it requires a lot of consideration. Some of the mistakes to avoid are: not taking adequate time and caution when hiring or promoting, or hiring a friend. It will help your company flourish by putting boundaries around what can be expected, demanding clear reports of accomplishments, and assigning a definite time in which the relationship will have to be reevaluated. By adhering to these recommendations, it is possible to place trust bravely in the right representative.


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